A&M; Records at 25--Success Hasn't Spoiled the Magic

In August, 1962, an unknown trumpet player named Herb Alpert and his record promoter friend, Jerry Moss, started their own record company in the garage behind Alpert's rented West Hollywood home.

Operating on an investment of $1,000 and carting around copies of their first record--"The Lonely Bull,"--in the trunks of their cars, Alpert and Moss received first-week paychecks of $84.37 and $79.77, respectively. Alpert got the extra $5 because he was married.

It's perhaps the record industry's favorite success story.

Twenty-five years after its humble birth, A&M; Records is the largest and most successful privately owned record company in the world, with more than 200 employees and estimated annual sales of about $100 million. Since "The Lonely Bull"--which was performed by Alpert and his group, the Tijuana Brass--A&M; has released nearly 200 gold and platinum albums, including Carole King's "Tapestry" and Peter Frampton's "Frampton Comes Alive," which set industry sales records in the early 1970s. The current artist roster includes such million-sellers as The Police, .38 Special, Styx, Bryan Adams and Janet Jackson.

The company now occupies a two-block compound that includes Charlie Chaplin's old movie studio at Sunset Boulevard and La Brea Avenue in Hollywood. It boasts a movie-production division, A&M; Films, which produced the critically acclaimed "Birdy" and "The Breakfast Club" and is producing a film about the Soviet invasion of Afghanistan called "The Beast." It also has a music-publishing arm, Almo/Irving Music, and built what is reputedly one of the finest recording studios in the country--where the 1985 "We Are the World" sessions were recorded.

Along the way, Alpert and Moss, both 52, have become multimillionaires. They could be even richer but are said to have turned down numerous offers in recent years to sell their company or peddle its stock to the public. With the recent sale of CBS Records to Sony Corp. for $2 billion, some analysts believe that A&M; could bring as much as $500 million.

As chairman, Moss oversees the everyday operations along with President Gil Friesen, while Vice Chairman Alpert devotes most of his time to creative aspects. After a string of hits and grueling concert tours between 1962 and 1969, Alpert disbanded the Tijuana Brass and even stopped playing the trumpet for a while. He re-emerged in 1979 with a hit album called "Rise" and has remained an active performer and record producer since. Earlier this year, he scored a Top 20 hit with his album, "Keep Your Eye on Me."

"This really is an artist-owned company," one staffer said, "and Herb is here every day, working in his office or in the studio."

Publicity shy to the point of eccentricity when it comes to business matters, Alpert and Moss declined to be interviewed for this article, as did Friesen, saying through a spokesman, "We prefer to let the success of our artists speak for us."

Others in the record business were less reluctant to discuss the company. Echoing the sentiments of several industry leaders queried about A&M;, Arista Records Chairman Clive Davis called the company "a real inspiration, a quality label that has shown the ability to survive." Island Records Chairman Chris Blackwell called A&M; "the record company I most admire."

Said Capitol Industries-EMI Chairman Joe Smith: "A&M; is one of the few companies in the business that has been consistently successful, and I think it's due in part to its consistency of management."

Indeed, A&M; has a reputation in the industry for keeping its executives. Friesen was hired in 1964--the company's third employee--and a number of other key managers have been with the firm for more than 20 years. "This is the company I always wanted to work for," said one promotion executive who logged time at three major companies before joining A&M; seven years ago.

A&M;'s only bad years in business were 1978 and 1979, when the industry suffered a severe recession, with sales plummeting nearly 20% because of a confluence of factors such as competition from video games, home taping and counterfeiting.

A&M; is widely admired for its refusal to engage in the kind of budget-busting competitive bidding for established artists that some larger firms consider a necessary evil. "They seem to spend their money well by signing new artists and giving them time to develop," said one executive.

"They've shown a remarkable ability to change over the years," said Arista's Davis. "From the Tijuana Brass in the 1960s to the Carpenters and Peter Frampton in the 1970s to The Police and Janet Jackson in the 1980s."

In 1984, A&M; embarked on a diversification program aimed at making itself less vulnerable to the ups and downs of pop music.

First, it took on distribution of Northern California-based Windham Hill Records and successfully introduced so-called "New Age" music to a mass audience. One Windham Hill album, "December," a collection of soothing piano solos by George Winston, has since sold more than a million copies.

Next, A&M; signed a distribution agreement with Word Records, the largest sacred and gospel music label, which resulted in "Unguarded," a million-selling album by Christian rocker Amy Grant.

Finally, the company added a classical label, Nimbus, and a children's music label, Shoreline.

But other, intangible factors may play a significant role in A&M;'s reputation for quality in the record business. Despite its steady growth over the years, insiders and outsiders insist that the company has retained its feeling of smallness.

For example, A&M; does not manufacture or distribute its own recordings. Those functions are handled by RCA Records--now part of the Bertelsmann Music Group--in exchange for a percentage of A&M;'s profits. With only 50 artists under contract, A&M; releases an average of 40 records a year--about the number that industry giant CBS releases each month. As a result, employees say, each artist and each record gets more attention than they would at a larger company.

Around A&M;'s corporate offices--a labyrinth of funky, comfortable bungalows--the word most often used by employees to describe the atmosphere is "family."

"What sets the tone is the personalities of the two owners," said one executive, who joined the company only recently. "Herb is just the sweetest guy in the world, and all he cares about is making music. And Jerry radiates success in a completely non-offensive way--he could be cutting your bowels out, and you'd still like him."

At the company's Christmas party this year, "Herb and Jerry got up on stage and talked, and they seemed so sincere and genuine that it made everyone feel good," the executive said, adding with a laugh, "Even if it isn't genuine, the act is so good that it doesn't matter."

"The corny thing is, it is genuine," said another executive, recalling a recent Silver Anniversary gathering during which Alpert, Moss and Friesen were given an award by staff members. "All three men were crying," he said. "It really gave everyone in the room goose bumps."

TOP OF THE POPS

Albums produced or distributed by A&M; Records that reached No. 1 on Billboard magazine's Pop Album Chart